What Is Bad Credit?

Bad credit has become a catchphrase doled out by financial experts, while the general population scratches their heads and wonders what it really means. Few of us are genuinely aware of the effects a poor credit score can have on our lives. You may think that it’s only about not paying your bills or loans on time. The fact is, a negative credit score can affect various aspects your life, like finding a job, applying for a loan, or getting insurance.

What Is Bad Credit?

First things first, what exactly is a poor credit score? The question may be simple, but the answer is a bit more complex.

There are two major scoring models, FICO and VantageScore. Both have a fixed range from 300 to 850 points. If your credit is below 600 on any of the two, then it is considered to be a bad credit score. However, the number on its own does not mean much. Add to the mix the different scoring models and you may feel you are drowning in a pool of financial information and numbers.

Who Decides?

You may know what bad credit is, but what causes it? This question has a simple answer: if you fail to pay your previous credit agreements (especially your credit card bills), your financial score begins to drop. If this habit continues over a period of time, the credit score falls below 600.

As we mentioned before, the score on its own doesn’t count for much. People who have negative scores may still find themselves eligible for loans and mortgages. The people who decide whether you are eligible for a line of credit are the lending agencies; these include private lenders as well. Whatever your score may be, the lending institutions and insurance agencies make a decision about whether you are worth the risk.

Battle Bad Credit

Having bad credit is not the end of the world, although it can definitely make your life more difficult. The good news is that you can correct your poor credit score with some common sense and better money management skills. The even better news is that you don’t have to do it alone. There are credit repair agencies that can enable you to improve your financial report and eliminate bad credit. Don’t let a poor credit score stop you from achieving your dreams. Get on top of it, and get help from a credit repair specialist. At Action Credit Repair, our experts will provide a personalized credit consultation, an audit of your credit history, and offer solutions to all of your credit obstacles. Contact us today to speak with an experienced professional: Call 518-945-2299 or email info@actioncreditrepair.com.